More Disruptive Technology Start-Ups, Please

March 03, 2012

Technology, combined with social networks have the power to stop oppression and improve people’s lives.

We are already seeing the impact of Facebook, Twitter, Google+ and Linkedin in the Middle East, and the media industry, but we believe this change is just the beginning. Other industries like Finance, Education and Healthcare may be nearing their Napster moment.

At my Start-up, Lenddo.com we are using the social graph to improve people’s lives and restructure finance. Members are using their online reputation to prove identity and access credit in regions where there is little access to credit. Every day members are able to get education for loved ones, medicine for family members, and shelter for relatives. Tangible life improvements. We expect to impact millions.

The other day I was asked about the predictive capabilities of algorithms, so I thought some background information might be helpful.

We like to think of ”trustworthiness” algorithms as falling into three broad categories.

Bayesian – This is classic machine learning (pattern matching) to build a probabilistic model, within a acceptable false positive, false negative range. The core to growing these predictors is massive volumes of data. Data could include any information collected or observed. This can include; stated interests, sites visited, biometrics, writing style, age, words uses, images, network composition, machine configuration, geographic data, internet usage, job, demographics, education, hobbies, and financial history. The Adtech industry has built a substantial “behavioral profiling” infrastructure to predict what ads are most appropriate (sell you sugar water), why not leverage and extend this technology to actually empower individuals with access to credit?

Validators – (Heuristic, Taxonomical, or Bayesian) – these algorithms are used to validate or perform a reasonableness test for information volunteered by an applicant or her friend. For example: someone from a big company will generally have friends at that company, or someone from Manila will generally have log-ins from Manila, or someone in medicine will use certain words in their general correspondence. Validators are very important in the Emerging Markets, where standard RAC (Risk Assessment Criteria) rules are necessary but insufficient due to a general shortage of customer data.

Homophily – (“birds of a feather flock together”) builds on the well documented tendency for individuals who interact regularly, or share some social bonding to behave similarly. In science, many of the best Homophily data scientist come out of computational psychology or epidemiology. In business, Online Ad networks (Demand Side Platforms) are a good place to hire as Homophily based algorithms are often the basis of their mathematical underpinnings.

More on Homophily

A good example of Homophily in nature is with smoking, game fraud, sexual promiscuity and obesity. For example there is some great studies and talks by Harvard health researcher Dr. Nicholas Christakis.

His team found in a social network of 12,000 over 32 years, that friends had the greatest impact on becoming obese and that the type of friendship made a difference. For example, a close, mutual friendship resulted in a 171-percent increased risk of obesity while a one-way friendship increased the chances by 57 percent. These findings contrast with a 40-percent increased risk among siblings and 37 percent between spouses. Friendships are so influential, in fact, that the likelihood of obesity even increased when the friend of a friend was the one to gain weight. Same gender relationships also have a stronger influence than those between genders.

Perhaps most surprising was the finding that geographical closeness made no difference. This last fact is interesting to us, because we believe geographic clossness will become even less important as people increasingly use the internet to maintain relationships. We are able to use the social graph to measure “closeness” and “friendship strength” as well as of course “geospatial closeness”.

I Hope this is helpful. Predictive Algorithms and important part of what makes Lenddo so simple for our members.

If you have an interest in using math to makes people’s lives simpler and better, please lets us know. At Lenddo.com we are trying to make a dent in the universe and always looking for exceptional Data Scientists.

October 28, 2011

The key to gamification is understanding motivation, and no game company demonstrates this understanding more than Zynga. Game, Education, Healthcare and Fintech Entrepreneurs can learn a lot by following the motivation techniques exhibited in Zynga products. Don’t believe me? Think of it this way: In a few month Zynga motivated over 50 Million new people to learn how to run a virtual farm, and have fun doing it. Try motivating 50 people to sign up for a class on farm management and you will appreciate their accomplishments.

Gabe Zichermann had a great post yesterday where he described a two branch taxonomy for understanding motivation. (Intrinsic and Extrinsic). It’s a start, but insufficient. The Mad Men of Madison Avenue sometime refer to a three branch motivation taxonomy: get paid, get laid, or get made. This too is insufficient. Entrepreneurs and product managers need a more robust framework, if they hope to create breakthrough products.

The good news is I believe a “unifying” motivation framework is coming!

Motivation has always been an elusive concept. Economists, Managers, Marketers, Psychologists and Anthropologist have wrestled with the topic for centuries. I believe thanks to click and social graph data, the motivational social sciences will take significant steps forward in the next four years. Big Data to the rescue!

Four years is an eternity in internet time, so in the interim I propose a five node framework/taxonomy:A. Intrinsic Process: Derived from fun or enjoyment during the task B. Instrumental: Derived from expectations of tangible rewardsC. Self-Concept External: Derived from a desire to improve one’s reputation and imageD. Self-Concept Internal: Derived from a need to meet personal standards and achieve E. Goal Internalization: Derived from a deep-rooted belief in the cause or principle

Sophisticated web application developers can look at all their work flows, screen design and user stories through the lens of “motivational profiles”, and whenever possible, customize the UI, UX and messaging based on the predicted/observed motivational profile.

Hope this proves helpful, especially if you are about to use "social gamification" to change education or healthcare. Good Luck!

March 18, 2010

I generally prefer to hire super-smart Scientists, Technologists, Engineers and Mathematicians (STEM). Start-ups are all about having and then implementing great ideas - not just one “big idea” but hundreds of innovations, deployed in rapid iterations to create real competitive advantage and customer value. Entrenched players usually have bigger brands and deeper pockets, so a start-up needs to use intellect and hard work to win. I’ve found STEM graduates are well-prepared for the hard work and intellectual rigor of growing a startup.

Two years ago, however, I hired a Philosophy major. As it turns out, it could not have worked out better. Our resident Philosophy major was no stranger to hard work and analytical rigor.

My secret’s out of the bag: Maybe I’m on to a start-up hiring trend. Samidh Chakrabarti points out that several entrepreneurs I respect have Philosophy degrees, including Amol Sarva (Peek), Ken Reisman (TLists), Damon Horowitz (Aardvark), Patrick Byrne (Overstock), Josh Snyder (Treeline Labs), and Chris Dixon (Hunch). I can’t help but agree that students of Philosophy have many of the characteristics needed to succeed in an entrepreneurial environment. It’s great to see that these philosophical founders have already blazed a path. Maybe they can teach me a thing or two about where to find talent that has the desire, discipline and drive to start a company one day.

Therefore, this year, as we look for top new graduates to join our teams, we’ll be interviewing Philosophy majors in addition to the usual Science, Technology, Engineering and Math majors.

BTW: If you’re about to graduate from a top school with a STEMP degree, and would like to try your hand in the entrepreneurial world, please call me or email me your resume.

February 11, 2009

Eric Janszen does a masterful job articulating the conditions needed for a massive innovation bubble. His article is required reading for any entrepreneur looking change the world. The move away form oil will be as big as the transformation from animal power to steam, or transformation from steam to oil.

There are two types of bubbles; asset bubbles and innovation bubbles. The Asset bubbles are a zero sum game that doesn’t offer anything new to society, but innovation bubbles are critical to rapidly deploying new technology.

The Tulips Bubble of 1637 is the classic example of an asset bubble. More recently the assets of real-estate, oil, and gold have all had their bubbles. I believe asset bubbles are a natural occurrence given our collective human nature. (I wonder if algometric trading amplifies or dampens our human propensity for froth and panic.)

But innovation bubbles are a different organism. Innovation bubbles are the markets (our collective intelligence) realization that technological change is afoot. Canals and Railroads are the classic example form the 1800. More recent examples include Radio, Automobiles, TV, and the Internet. Fortunes will be made and lost, but in the wake of the bubble a new technology will have taken root.

I can’t wait to see what technologies replace oil and coal, and even more so; I can’t wait to see what entrepreneurs make it happen. Will it be microbiologist hackers modifying algae to produce cheep fuel? Maybe nanotechnologists will invent cheep solar cells that are super efficient. Perhaps some grad student is about to drop out of college to commercialize his ultra-capacitor thus ending the need for batteries. Moving away from oil will take dozens of new inventions and business models; I am just glad Eric Janszen gives us a roadmap.

January 20, 2009

In Mike Nichols’ 1967 classic “The Graduate”, Dustin Hoffman’s character gets “just one word” of advice: “plastics.” It was a sign of the times; the groundbreaking technology was changing everything from consumer goods to space equipment.

Today, a new generation of materials is looking to graduate to the status of plastic. The problem with plastic is its lifecycle. Plastic production is dependent on oil; therefore, the supply chain is susceptible to the vulgarities of economics and geopolitics. Plastic disposal often involves landfills, which come at an astounding expense. The race is on for a greener, cheaper, and more profitable alternative. Scientific drama will unfold, fortunes will be made and lost, and in the end, plastic will take its place among lead, iron and slate as just another material. Algae-based, fungal-based, mineral-based and cellulosic alternative are all in the race.

Paper byproduct Arboform looks like plastic and even employs injection-molding - just like plastic.

"The cellulose industry separates wood into its three main components
-- lignin, cellulose and hemicellulose," ICT team leader Emilia Regina
Inone-Kauffmann told DPA.
"The lignin is not needed in papermaking, however. Our colleagues mix
that lignin with fine natural fibers made of wood, hemp or flax and
natural additives such as wax. From this, they produce plastic
granulate that can be melted and injection-moulded."

The final product can resemble highly polished wood or have a more matted finish and look like the plastic used in most household items. The transition from Plastic is a saga worth watching, I look forward to the next “New New”.

August 01, 2008

Saudi Arabia wields enormous political and economic might because of their vast oil reserves. True, there are many other countries that produce oil, but no other country dominates like Saudi Arabia. Their geological advantage is not just quantity, but also quality -- they can pull it out of the ground a faction of the cost most countries incur.

Lately, with oil over $130, it seems America’s importance is shrinking as we wire much of our national income (700B/yr) to oil producing nations. All might flows from economic might, so there is a real reason for concern -- but there is no reason for despair. As John Pierpont Morgan use to say "Never Bet Against America".

The United States is the Saudi Arabia of Innovation.

We are good at taking risks, we are good at commercializing technology, we reward innovation and we admire creativity. Core to our culture is a bias towards action, that does not get bogged down in history or tradition. I am continually impressed by the caliber of my coworkers abroad, but autonomous risk taking is seldom their strongest suit.

America, by no means have a monopoly on innovation, but our “reserves” are awesome. Lets just say I have Techno-Optimism. In the coming months and years there will be great advances. I expect America (especially Wall Street and Silicon Valley especially) to play a critical role.

Solar – A Moore’s law of solar mean grid parity is just a matter of time.

July 26, 2008

I live on an island, so you would think my neighbors and I would be very in tune with the impact of greenhouse gases on rising sea levels, but actually my island is Manhattan, and I think New Yorkers are more concerned with fashion, finance and media than environmental trends. Although city dwellers usually have smaller environmental footprints, it is easy to forget nature when you live in an urban jungle. So I encourage my neighbors to check out JPLs Climate Time Machine.

The value of Manhattan real state is so high that the engineering challenges of raising water will be easily overcome. The Hamptons may not fare as well, but the big problem is the impact on millions of people that live close to sea level. Bangladesh, Micronesia, Southern Florida and parts of Northern Europe are toast! This type of mass relocation will make New Orleans look like a summer field trip.

Although years ago I turned down a job at JPL, I still appreciate their excellence. Thank you JPL for the Climate Time Machine.